The adoption of the Universal Product Code (UPC) in April 1973 transformed bar codes from a technological curiosity into a business necessity. Before the UPC, every company had its own way of identifying its products. Some used letters, some numbers, some both, and some had no codes at all. Moreover, before the UPC, various bar code systems were in use, all incompatible. After the UPC, any bar code on any product could be scanned and interpreted in every suitably equipped store in the company.
The UPC comprises a twelve-digit bar code which is split into two halves. The first digit is always 0, except for products like meat and produce that have a variable price dependent upon weight, and a few other special types of items. The first five digits after the "0" are the manufacturer's code, the next five are the product code, and the last is a "check digit" used to verify that the preceding digits have been scanned properly. Hidden cues in the structure of the code tell the scanner which end is which, so it can be scanned in either direction.
In certain products such as meat, etc., the first part of the code identifies the type of item (chuck steak, chicken wings, etc.), and the second half gives the price. Books, too, are given the price coding in the second code group, and a part of the ISBN code is appended in another, smaller, code group.
Manufacturers register their codes with the Uniform Code Council (UCC) to get an identifier code for their companies, then register each of their products. Thus, each package that passes over a checkout stand has its own unique identification number.
Standardization made it worth the expense for manufacturers to put the symbol on their packages and for printers to develop the new types of ink, plates and other technology to reproduce the codes with the exact tolerance required. Despite the estimated $200,000 per store cost of scanning equipment, and the potential $200 million annual cost to manufacturers, tests showed the UPC system would pay for itself in a few years.
Once the level of 85% identification of products was reached in the late 1970's, sales of scanner systems took off rapidly. In 1978, less than 1% of all grocery stores had scanners. By mid-1981 the figure was 10%, three years later it was 33%, and today over 60% of all grocery stores in the nation are using checkout scanners. Other types of stores have begun to follow, led by discount chains such as K-mart and Wallmart. (The preceding discussion is adapted from "Bar Codes Sweep the World", Invention and Technology, Spring 1993, pp57-63).
Although originally sold as a way of reducing time and errors at the checkout without adding register employees, stores soon discovered that one of the primary sources of savings in the use of the UPC system is that it is no longer necessary for a store to pay an employee to individually tag each and every item in the store. Instead, a single price label is placed on the shelf next to (or under) the items to be sold. This also allows price changes to be made without having to re-tag hundreds of items, and eliminates the possibility of mis-tagged items.
While ideal for the retailer, shelf pricing has its disadvantages from the consumer's point of view. Since there is no price on the item, the checkout scanner (which is working from a central store database of prices) will charge the customer based on the database price, without reference to the shelf price. Unless he or she notes the price from the shelf on each and every item, a consumer has no way of knowing if the shelf price is the price he or she is actually charged at the register.
There may be some reason for consumers to mistrust shelf pricing. According to an article in the Ithaca (NY) Journal, recent studies by Information Week claimed that American consumers were overcharged some $2.5 Billion in 1992 ("NYPIRG: Scanner bill doesn't add up", Ithaca Journal, Apr. 19, 1993, page 3A), and a study in Money Magazine estimated that scanner errors account for more than half of supermarket profits, giving consumers a 1-in-10 chance of being overcharged on each visit to one of the 30% of stores that routinely overcharge. ("Don't Get Cheated by Supermarket Scanners", Money Magazine, Apr., 1993, pp. 132-138)
The Money Magazine article (p. 138) indicates that Connecticut exempts stores from a coding law if the store uses computerized shelf pricing. To this inventor's knowledge, the "electronic unit price shelf tags" are, in fact, small electronic readouts under each item in the store which directly display the scanner database price for each item. This is obviously a huge investment for a store, not to mention the time and trouble to reprogram a system when moving items from one shelf to another.
Legislation requiring stores to guarantee the accuracy of shelf prices against scanner prices may be expected in the future. Tompkins County (N.Y.) is currently holding hearings on such a law requiring a 98% accuracy rate, and New York, among other states, is considering it. Stores approve of a scanner accuracy law, since it allows them to continue shelf pricing in the absence of item pricing, but they will need some way of checking the shelf prices to avoid penalties under the law. Having an employee manually check every shelf label against a price list will eliminate some of the gains made by going to shelf pricing in the first place. Also, counties or states will need some way of checking shelf prices against scanner prices to enforce any law which eventually goes into effect.
Watson, et.al., U.S. Pat. No. 4,654,514, recognizes the problem of incorrect shelf prices and the difficulty of keeping them up to date. He solves the problem by eliminating the shelf price and giving the consumer a shelf mounted scanner to scan the UPC on the item, displaying the correct price from a database downloaded from the store host. This system just makes the problem worse, from the point of view of the consumer, since this means no prices are displayed at all, neither on the shelf nor on the item, and the customer must scan every item on the shelf to get price comparisons. The confusion on a busy shopping night can be easily imagined.
Tashiro, et.al., U.S. Pat. No. 5,065,002, provides a portable unit having a bar code reader and printer, which reads bar codes and then prints them. No particular application is disclosed, nor are any characteristics or uses of the bar codes scanned. There is no processing of the data read, no database of prices and no price lookup. Bar codes are scanned by a hand-held scanner wand, stored in the wand, and dumped to the printer for duplication.